S&P 500 ENDS THREE-WEEK DECLINE... Stocks are ending the week on a strong note after falling for the previous three weeks. An oversold condition and the presence of underlying chart support are also playing a role in this week's buying. The 9-day RSI line in the... READ MORE
This may seem like a foolish title, given that the Fed could be about to raise short-term interest rates by as much as 75 basis points in September with further, but smaller, hikes following that. However, bonds revolve around the business cycle in a chronological sequence, as do stocks and... READ MORE
The big daddy of all market trends is the secular or very long-term one, and it's about to have a big influence as to whether the June low will hold, meaning prices are about to reach new all-time highs, or if we are going to return to a... READ MORE
STOCKS SELL OFF FOLLOWING POWELL SPEECH... A modest rally attempt was turned back pretty decisively today following a speech by Fed chief Powell that sounded more hawkish than the market was expecting. Friday's heavy selling also reinforced the view expressed last Friday that the summer rally in stocks... READ MORE
Back in June, I wrote an article entitled Are Commodities Losing their Mojo?It drew attention to the fact that some long-term indicators were pointing to at least a temporarypull-back in prices. That process is already underway, but the article also pointed out that energy usually lags other industrial commodity... READ MORE
S&P 500 STALLS AT 200-DAY AVERAGE...The two month rally in stocks has run into a couple of formidable resistance lines while in an overbought condition. Last week's message showed the S&P 500 nearing a test of its 200-day moving average and a falling... READ MORE
It's a Primary Bull Market for the Dollar Chart 1 shows that the US Dollar Index is very much in a primary bull market, having violated a (dashed) secular down trendline a few months ago and, more recently, completed a 7-year rectangle formation. The green-shaded areas identify those... READ MORE
JUNE HIGHS CLEARED... Last week's message showed major stock indexes testing initial resistance at their June highs, and suggested that an upside penetration of that resistance could lead to a possible test of their 200-day moving averages. Those June highs have since been exceeded. Chart 1 shows the... READ MORE
The summer rally has enabled several indexes to push through important resistance, but, since there was a lot of backing and filling at higher levels earlier this year, there are several places where even more resistance is apparent. If you want to be bullish, for instance, take a look at... READ MORE
INTERMEDIATE TERM RALLY CONTINUES... The stock rally that started in mid-June continues to gain ground which confirms that the market has put in an intermediate term bottom. The question is how far that intermediate rally can rally within the current downtrend. Hopefully, the charts shown below will help determine where... READ MORE
The rally since mid-June has taken several indexes back to their extended breakdown trendlines, which mark one demarcation point between bull and bear. Chart 1, for instance shows that the NASDAQ completed a top in May and then followed through with further weakness. By mid-June, the Index found a bottom... READ MORE
Markets are getting ready to rock & roll to the upside! In this exclusive StockCharts TV special, Larry has a lot to show you and a lot of education to share. He digs into the three key reasons he's expecting a major rally: panic selling, important buying, and... READ MORE
STOCK INDEXES GAIN MORE GROUND... Despite a .75% rate hike by the Fed on Wednesday, and a second quarter of negative GDP growth on Thursday, stock indexes continued to gain ground. And they're in the process of testing some overhead resistance lines. Chart 1 shows the Dow Industrials... READ MORE
This week, we diverge from our normal chart talk to focus on the economy, as the word "recession" is now on virtually every one's lips, provoked by a lot of misinformation. First, there seems to be a general understanding in the media that the definition of... READ MORE
MODEST WEEKLY GAINS... Stock indexes gained some ground this week, but not enough to reverse major downtrends. And they remain below overhead resistance levels. The daily bars in Chart 1 show the Dow Industrials rising to the highest level in six weeks and clearing their 50-day moving average. While that... READ MORE
Due to its sensitivity to interest rates, housing has the greatest average lead time going into recessions than any other economic (as opposed to financial) indicator. For that reason alone, it is worth examining amid the constant talk of recession. The HMI vs. Housing Starts Earlier this week, two important... READ MORE
TEN YEAR - TWO YEAR YIELD CURVE INVERTS... Chart 1 shows the spread between the ten year and two year Treasury yields falling below the zero line which signals an inverted yield curve. That means that the shorter two-year yield is now higher than the longer maturity ten-year yield. That... READ MORE
In late April, I wrote that bond yields had run into resistance and a pause in the on-going uptrend was likely. Yields on longer-dated maturities initially moved slightly higher, but are now at approximately the same level as that April article. However, more corrective activity appears likely, as commodities (e.... READ MORE
MAJOR STOCK INDEXES GAIN ON THE WEEK... Stocks saw modest gains on the week but not enough to disturb their major downtrend. Chart 1 shows the Dow Industrials gaining .77% for the week but remaining well below overhead resistance levels and moving average lines. Chart 2 shows the S&... READ MORE
Waterfall declines leading to capitulation are easy to observe and understand when we have the benefit of hindsight. However, they are almost impossible to identify ahead of time. One characteristic often associated with such uncomfortable price moves is an unexpected weakening of economic activity, where confidence literally falls off a... READ MORE
STOCKS REMAIN UNDER PRESSURE...Stocks are ending the quarter with more selling. The weekly bars in Chart 1 show the S&P 500 down more than 3% on the week with a monthly loss of more than 8%. For the year, the S&P 500 is down 20%... READ MORE
Long-term indicators, such as the KST and the S&P relative to its 12-month MA, remain in a bearish mode, but, that said, it would certainly be unusual to see them turn bullish immediately after the final low. Indeed, Chart 1 shows that the Index is currently well below... READ MORE
BEAR MARKET BOUNCE...Major stock indexes had their first gain in three weeks and made up for the previous week's big losses. But any rebound still has to be viewed as a bear market bounce. The weekly bars in the first three charts below paint a similar picture.... READ MORE
Commodities have been on a tear since their lows set in the spring of 2020, but every news outlet you tune into these days is talking about inflation, gasoline in particular. That does not mean that prices cannot go higher. Over the long-term, that's probably a realistic scenario.... READ MORE
RISING RATES HURT HOMEBUILDERS... Weakness in homebuilding stocks is another sign that the U.S. economy is weakening. Rising mortgage rates which are closely tied to bond yields have a lot to do with that. The brown weekly bars in Chart 1 show the U.S. Home Construction iShares (ITB)... READ MORE
Prices often move in the opposite direction to the expectations of most investors and traders. In many cases, that happens because the latest news has already been factored into prices and market participants have already begun to anticipate the next development. For example, a group of institutions might like the... READ MORE
HOT CPI REPORT SIGNALS LOWER STOCK PRICES... Friday's report that the May Consumer Price Index gained 8.6% from the previous year was the highest inflation rate in more than forty years and pushed stock prices sharply lower for the day and week. Going into the report, expectations... READ MORE
A couple of weeks ago, I wrote about the fact that the technical position of gold was extremely finely balanced, and that it was "Either in a Hard Place or a Sweet Spot". My conclusion was that its short-term position was improving and that the sweet spot scenario... READ MORE
It is possible for prices of individual asset classes to move in a linear up or down trend for an extended period. However, this rarely happens with inter-asset relationships, which rotate around the business cycle. As a result, it is helpful to monitor inter-asset relationships and their momentum to see... READ MORE
NOT MUCH OF REBOUND...This time last week it seemed clear that stocks had put in a short-term bottom marking the start of a potential bear market rally. So far at least, that rally hasn't gone very far. The three charts shown below show the same overhead resistance... READ MORE
The long-term technical position of gold is extremely finely balanced and could easily tip into a full-fledged bear market, or start a new secular up leg to the bull trend that began in the opening years of this century. Chart 1 really says it all. First, it expresses gold adjusted... READ MORE
Larry is back and ready to weigh in with his forecast of where stocks—and the economy—are headed in this new StockCharts TV special. He takes a look at some of the "Fallen Angels" of the market and discusses the ongoing situation with inflation. Afterwards, he focuses... READ MORE
WEEKLY S&P CHART SHOWS OVERSOLD CONDITION... Stocks are having their best week in two months which suggests that a short-term bottom may be in place. Before looking at daily charts, however, it's worth checking a weekly chart to keep things in perspective. The weekly bars in... READ MORE
The stock market's recent sell-off has made the front pages and top headlines in TV broadcasts, and CNN's famous Fear and Greed Index has fallen to an extreme level of fear. My contrarian bones say it's time for a rally. Is that right? Yes... READ MORE
S&P 500 REMAINS IN DOWNTREND...Stock prices continue to weaken with no sign of a bottom. The daily bars in Chart 1 show the S&P 500 having fallen to the lowest level in more than a year and nearing a 20% loss which signals a bear... READ MORE
Chart 1 shows that the Invesco DB Commodity Tracking Fund could be on the verge of breaking out from a 3-month consolidation pattern. It also points out that the number of commodities participating in the rally has been narrowing of late. That's because the indicator monitoring a universe... READ MORE
INFLATION REMAINS THE BIGGEST THREAT TO MARKETS... It was reported this morning that April's Producer Price Index for the past year came in at 11%. That followed yesterday's report that the Consumer Price Index was 8.3%. Both reports confirm that inflation remains dangerously high with... READ MORE
I have written two articles about Bitcoin in recent months. The first,last December, concluded that "there are definitely some cracks appearing (in the technical structure), but a shrinking consensus of evidence continues to point to an uptrend." Thesecond, entitled "Has the Bitcoin Bubble Burst", noted... READ MORE
STOCK SELLING RESUMES... Stocks are being sold heavily today and are totally reversing yesterday's Fed relief rally. Stocks have given back all of Wednesday's price gains and look poised to fall further. Chart 1 shows the Dow Industrials falling sharply today after meeting resistance at their... READ MORE
I'll get to the Fed element later, but, first, a few words on the Dow Jones Global Stock Index. Chart 1 shows that it has been experiencing a series of declining peaks and troughs since last November. That's not a bullish sign. Neither is the fact... READ MORE